THE NEW SURINAM NV
An introduction to draft legislation
The law of the Republic of Surinam is in full swing. The Surinam government on a continuing basis is striving to introduce legislation in order to enhance its ability to attract quality business. A recent example is a whole new Civil Code, to become effective in 2010 or 2011 at the latest. Part of this Civil Code is a new act on corporate law: Book 2 Surinam Civil Code (the “Act”).
The Surinam limited liability company (NV) as governed by the Act is a completely new, contemporary and revolutionary entity with unprecedented possibilities. The main object of the Surinam government is flexibility and maximum freedom of organization and presentation. Accordingly, the Act contains few mandatory provisions, such as provisions relating to the interests of creditors and minority shareholders as well as directors’ liability.
The Surinam NV can be established in a form that resembles what a foreign shareholder, in for instance Europe or in Anglo-Saxon or Caricom countries, encounters in his own legal system: the Surinam NV can, for example, be organized like a Dutch NV, a Delaware corporation, a BVI company or a German GmbH. The motto is: “You request, we provide”. The chameleonic possibilities of the NV contribute to its attractiveness.
The Act shows a bold new approach to Surinam corporate law as such. One striking aspect is that this legislation gives shareholders far more freedom to organize their company than in the past:
- shareholders of an NV may choose between the English/American one-board system and the traditional continental European two-tier system;
- there may be voting and non-voting shares; and
- there may be par value shares or non-par value shares.
For the formation of an NV and for any amendment of the articles of association a notarial deed is required. However, the formation can take place quickly (within hours if necessary) and without many other formalities. The language in which the deed is drawn up can be Dutch or English, as long as the civil-law notary understands the language in question. For the formation, a ‘certificate of no objection’ issued by the President is no longer required.
Concepts like registered, subscribed and contributed capital do not occur in the Act. Therefore, no minimum capital is required, unless such a requirement is included in the articles of association. There can be voting shares, non-voting shares and shares with restricted voting rights. Shares can have a par value. If shares have a par value, this may differ per category of shares. Also, the par value can be expressed in one or more foreign currencies.
There are only two formal restrictions: the equity of the NV may not be negative when establishing the company and one share with full voting rights that participates in the profit must be placed with the founder or a third party, or two shares, one of which has full voting rights and one that shares in the profit, as the case may be.
The Act also introduces the member-managed limited liability company. This form of the NV does not have a separate Board of Directors. The shareholders together will act as such Board, making the decision process much easier. In a shareholders’ agreement, the shareholders may determine e.g. how they manage the company and their remuneration.
Freedom of organization with regard to the articles of association is the key concept in the case of the new Surinam NV. Anything is possible, unless the law or public order and common decency oppose such. Book 2 Surinam Civil Code offers the ultimate corporate adventure.
Karel Frielink
Attorney (Lawyer) / Partner
(15 May 2010)
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